Correlation Between Canadian General and Richelieu Hardware
Can any of the company-specific risk be diversified away by investing in both Canadian General and Richelieu Hardware at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Canadian General and Richelieu Hardware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian General Investments and Richelieu Hardware, you can compare the effects of market volatilities on Canadian General and Richelieu Hardware and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Canadian General with a short position of Richelieu Hardware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Richelieu Hardware.
Diversification Opportunities for Canadian General and Richelieu Hardware
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canadian and Richelieu is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Richelieu Hardware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richelieu Hardware and Canadian General is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Canadian General Investments are associated (or correlated) with Richelieu Hardware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richelieu Hardware has no effect on the direction of Canadian General i.e., Canadian General and Richelieu Hardware go up and down completely randomly.
Pair Corralation between Canadian General and Richelieu Hardware
Assuming the 90 days trading horizon Canadian General is expected to generate 1.21 times less return on investment than Richelieu Hardware. But when comparing it to its historical volatility, Canadian General Investments is 1.14 times less risky than Richelieu Hardware. It trades about 0.08 of its potential returns per unit of risk. Richelieu Hardware is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,625 in Richelieu Hardware on September 4, 2025 and sell it today you would earn a total of 259.00 from holding Richelieu Hardware or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian General Investments vs. Richelieu Hardware
Performance |
| Timeline |
| Canadian General Inv |
| Richelieu Hardware |
Canadian General and Richelieu Hardware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Richelieu Hardware
The main advantage of trading using opposite Canadian General and Richelieu Hardware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Richelieu Hardware can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Richelieu Hardware will offset losses from the drop in Richelieu Hardware's long position.| Canadian General vs. Metalero Mining Corp | Canadian General vs. NeXGold Mining Corp | Canadian General vs. Firan Technology Group | Canadian General vs. Quorum Information Technologies |
| Richelieu Hardware vs. Theralase Technologies | Richelieu Hardware vs. FTI Foodtech International | Richelieu Hardware vs. Kua Investments | Richelieu Hardware vs. DGL Investments No1 |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.
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